Some of us were born to haggle. Others weren't. No matter which category you fall into, follow these tips to score a better deal when negotiating the price of your next car or truck.
Give yourself some guardrails.
To avoid emotion or sales pressure, set a firm maximum price before you visit the showroom. No deal is good if it leaves you in a tough financial position or saddles you with payments that hurt your ability to pursue other goals.
Pick the right time to shop.
If you have some flexibility when it comes to when you want your new vehicle, that could be valuable during your negotiations. The timing of your purchase can influence the deal that you get. Knowing when a dealer is most motivated to make a sale can help you find the best time to buy a new car.
Figure out what you can and should pay.
There are many costs associated with owning a car beyond your loan payment, including insurance, fuel, maintenance and repairs. It's also important to remember upfront costs such as tax, title and license, window tinting and other custom features, or an extended warranty. Figure out what you can afford by using an auto loan calculator. Aim to spend no more than 15% of your take-home pay on the total cost of owning your vehicle.
Keep in mind any expected changes to your income over the next few years, especially if you’ll be receiving bonus earnings or a cost-of-living adjustment like the one implemented through the military's BAH, basic allowance for housing privilege.
Talk price, not payments.
When negotiating, stay focused on the bottom-line purchase price. Dealers tend to talk about payments because they're easier to manipulate through extending the length of the car loan terms. Remember to leave a buffer on the purchase price to cover some of those upfront costs, like your title or tags.
Secure financing in advance.
If you can find a lender that offers it, you can put yourself in a stronger negotiating position with the car dealer by getting a preapproval or prequalification. Beware of dealer-financing rates that sound too perfect, as they could have high credit requirements or carry a cost that increases the total loan. Having financing secured before you buy may allow you to take advantage of manufacturer rebates or other incentives.
Shop for warranties.
Financing isn't the only extra your dealer will be hoping to sell you. You may also receive an option to buy an extended warranty. Like financing, you can also find an extended warranty on your own. However, be sure to consider how long you expect to own the car, the number of miles you'll drive and what guarantees are provided by the manufacturer.
Draw a line between buying and selling.
Keep in mind that you're negotiating two deals if you are trading in your car. Settle on the purchase price of the new vehicle before discussing your old one. Research the value of your trade-in ahead of time, taking its mileage and condition into account. If you can obtain offers on your trade-in from dealers in advance, it will save you time.
Keep one eye on the door.
While you may be eager to complete a deal, you should be prepared to walk away and try again another day with other car dealers.
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